In October 2006 Bancafé, the country’s fourth-largest bank, fell – at least partly a victim of the Refco scandal. Just as the country was recovering, executives from a smaller institution, Banco de Comercio, the country’s 15th-largest onshore institution, "handed the bank’s keys" to the supervisor and went on the run. This somewhat undermined their initial claims that the collapse was a result of customer jitters in the wake of the Bancafé failure.Political embarrassments aside – Bancafé had close links to president Oscar Berger – the double collapse has raised questions about systemic problems in the industry. In less than three months, two banks, two non-bank finance companies and a stockbrokerage had collapsed. At the end of November 2006 there was also a run on deposits triggered by unsubstantiated rumours of intervention at the second-largest bank, Banco G&T Continental. In a further blow to public confidence, during the first week of...
